The Senate was called to order by Vice-President Alicia Salisbury.
The roll was called with thirty-nine senators present.
Senator Oleen was excused.
Invocation by Chaplain Fred S. Hollomon:
Heavenly Father,
As a legislator I'm expected to remember a lot more than I am capable of.
Whenever I'm asked about a bill,
I'm expected to recall
Where it is, what it contains,
And how it affects us all.
Since we deal with hundreds of bills,
It is hard to remember them all;
And the ones that I do remember
Are not what I'm asked to recall.
I'm supposed to remember the names
Of every constituent I've met;
And every letter I've gotten
I'm never supposed to forget.
I'm expected to remember the names
Of everyone in the State House,
And every one of the birthdays
Of my kids, grandkids, and spouse.
I'm supposed to be quite familiar
With the rules of the House and the Senate,
And the heads of every department
And most of the people who are in it.
There's no way I can remember, O God,
All of the things I have mentioned.
How any human can do it
Is beyond my comprehension.
So what I'm asking of You, O God,
Since my total knowledge is small;
I pray that I'll only be asked
For the answers that I can recall.
I pray in the Name of Christ,
AMEN
GUESTS
Senator Feleciano introduced as guests of the Senate Michael A. Chowdry, Chairman,
President and Chief Executive Officer of Atlas Air, Inc., Golden, Colorado, accompanied
by his wife and family members.
INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS
The following bills were introduced and read by title:
SB 684, An act concerning the state lottery commission; relating to powers and duties;
concerning background investigation information; amending K.S.A. 1997 Supp. 74-8709 and
repealing the existing section, by Committee on Ways and Means.
SB 685, An act concerning natural gas; relating to certain refunds of Kansas ad valorem
tax reimbursements attributable to royalty interest owners, by Committee on Ways and
Means.
REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS
The following bills were referred to Committees as indicated:
Assessment and Taxation: HB 2684.
Federal and State Affairs: HB 2510.
COMMUNICATIONS FROM STATE OFFICERS
KANSAS HUMAN RIGHTS COMMISSION
March 6, 1998
In accordance with the provisions of K.S.A. 44-1004(13), William V. Minner, Executive
Director, Kansas Human Rights Commission, submitted the Fiscal Year 1997 Annual
Report.
The Vice-President announced the above report is on file in the office of the Secretary
of the Senate and is available for review at any time.
MESSAGE FROM THE HOUSE
Announcing passage of HB 2463.
Also, passage of SB 111, 122, 429.
INTRODUCTION OF HOUSE BILLS AND CONCURRENT RESOLUTIONS
HB 2463 was thereupon introduced and read by title.
REPORTS OF STANDING COMMITTEES
Committee on Commerce recommends HB 2831 be passed and, because the com-
mittee is of the opinion that the bill is of a noncontroversial nature, be placed on the consent
calendar.
Also HB 2534, as amended by House Committee, be amended on page 1, after the
enacting clause, by inserting a section as follows:
``Section 1. K.S.A. 1997 Supp. 44-703 is hereby amended to read as follows: 44-703.
As used in this act, unless the context clearly requires otherwise:
(a) (1) ``Annual payroll'' means the total amount of wages paid or payable by an em-
ployer during the calendar year.
(2) ``Average annual payroll'' means the average of the annual payrolls of any employer
for the last three calendar years immediately preceding the computation date as hereinafter
defined if the employer has been continuously subject to contributions during those three
calendar years and has paid some wages for employment during each of such years. In
determining contribution rates for the calendar year, if an employer has not been continu-
ously subject to contribution for the three calendar years immediately preceding the com-
putation date but has paid wages subject to contributions during only the two calendar years
immediately preceding the computation date, such employer's ``average annual payroll'' shall
be the average of the payrolls for those two calendar years.
(3) ``Total wages'' means the total amount of wages paid or payable by an employer
during the calendar year, including that part of remuneration in excess of the limitation
prescribed as provided in subsection (o)(1) of this section.
(b) ``Base period'' means the first four of the last five completed calendar quarters
immediately preceding the first day of an individual's benefit year, except that the base
period in respect to combined wage claims means the base period as defined in the law of
the paying state.
(c) (1) ``Benefits'' means the money payments payable to an individual, as provided in
this act, with respect to such individual's unemployment.
(2) ``Regular benefits'' means benefits payable to an individual under this act or under
any other state law, including benefits payable to federal civilian employees and to ex-
servicemen pursuant to 5 U.S.C. chapter 85, other than extended benefits.
(d) ``Benefit year'' with respect to any individual, means the period beginning with the
first day of the first week for which such individual files a valid claim for benefits, and such
benefit year shall continue for one full year. In the case of a combined wage claim, the
benefit year shall be the benefit year of the paying state. Following the termination of a
benefit year, a subsequent benefit year shall commence on the first day of the first week
with respect to which an individual next files a claim for benefits. When such filing occurs
with respect to a week which overlaps the preceding benefit year, the subsequent benefit
year shall commence on the first day immediately following the expiration date of the pre-
ceding benefit year. Any claim for benefits made in accordance with subsection (a) of K.S.A.
44-709 and amendments thereto shall be deemed to be a ``valid claim'' for the purposes of
this subsection if the individual has been paid wages for insured work as required under
subsection (e) of K.S.A. 44-705 and amendments thereto. Whenever a week of unemploy-
ment overlaps two benefit years, such week shall, for the purpose of granting waiting-period
credit or benefit payment with respect thereto, be deemed to be a week of unemployment
within that benefit year in which the greater part of such week occurs.
(e) ``Commissioner'' or ``secretary'' means the secretary of human resources.
(f) (1) ``Contributions'' means the money payments to the state employment security
fund which are required to be made by employers on account of employment under K.S.A.
44-710 and amendments thereto, and voluntary payments made by employers pursuant to
such statute.
(2) ``Payments in lieu of contributions'' means the money payments to the state em-
ployment security fund from employers which are required to make or which elect to make
such payments under subsection (e) of K.S.A. 44-710 and amendments thereto.
(g) ``Employing unit'' means any individual or type of organization, including any part-
nership, association, limited liability company, agency or department of the state of Kansas
and political subdivisions thereof, trust, estate, joint-stock company, insurance company or
corporation, whether domestic or foreign including nonprofit corporations, or the receiver,
trustee in bankruptcy, trustee or successor thereof, or the legal representatives of a deceased
person, which has in its employ one or more individuals performing services for it within
this state. All individuals performing services within this state for any employing unit which
maintains two or more separate establishments within this state shall be deemed to be
employed by a single employing unit for all the purposes of this act. Each individual em-
ployed to perform or to assist in performing the work of any agent or employee of an
employing unit shall be deemed to be employed by such employing unit for all the purposes
of this act, whether such individual was hired or paid directly by such employing unit or by
such agent or employee, provided the employing unit had actual or constructive knowledge
of the employment.
(h) ``Employer'' means:
(1) (A) Any employing unit for which agricultural labor as defined in subsection (w) of
this section is performed and which during any calendar quarter in either the current or
preceding calendar year paid remuneration in cash of $20,000 or more to individuals em-
ployed in agricultural labor or for some portion of a day in each of 20 different calendar
weeks, whether or not such weeks were consecutive, in either the current or the preceding
calendar year, employed in agricultural labor 10 or more individuals, regardless of whether
they were employed at the same moment of time.
(B) For the purpose of this subsection (h)(1), any individual who is a member of a crew
furnished by a crew leader to perform service in agricultural labor for any other person shall
be treated as an employee of such crew leader if:
(i) Such crew leader holds a valid certificate of registration under the federal migrant
and seasonal agricultural workers protection act or substantially all the members of such
crew operate or maintain tractors, mechanized harvesting or cropdusting equipment or any
other mechanized equipment, which is provided by such crew leader; and
(ii) such individual is not in the employment of such other person within the meaning
of subsection (i) of this section.
(C) For the purpose of this subsection (h)(1), in the case of any individual who is fur-
nished by a crew leader to perform service in agricultural labor for any other person and
who is not treated as an employee of such crew leader:
(i) Such other person and not the crew leader shall be treated as the employer of such
individual; and
(ii) such other person shall be treated as having paid cash remuneration to such indi-
vidual in an amount equal to the amount of cash remuneration paid to such individual by
the crew leader, either on the crew leader's own behalf or on behalf of such other person,
for the service in agricultural labor performed for such other person.
(D) For the purposes of this subsection (h)(1) ``crew leader'' means an individual who:
(i) Furnishes individuals to perform service in agricultural labor for any other person;
(ii) pays, either on such individual's own behalf or on behalf of such other person, the
individuals so furnished by such individual for the service in agricultural labor performed
by them; and
(iii) has not entered into a written agreement with such other person under which such
individual is designated as an employee of such other person.
(2) (A) Any employing unit which: (i) In any calendar quarter in either the current or
preceding calendar year paid for service in employment wages of $1,500 or more, or (ii) for
some portion of a day in each of 20 different calendar weeks, whether or not such weeks
were consecutive, in either the current or preceding calendar year, had in employment at
least one individual, whether or not the same individual was in employment in each such
day.
(B) Employment of individuals to perform domestic service or agricultural labor and
wages paid for such service or labor shall not be considered in determining whether an
employing unit meets the criteria of this subsection (h)(2).
(3) Any employing unit for which service is employment as defined in subsection
(i)(3)(E) of this section.
(4) (A) Any employing unit, whether or not it is an employing unit under subsection (g)
of this section, which acquires or in any manner succeeds to (i) substantially all of the
employing enterprises, organization, trade or business, or (ii) substantially all the assets, of
another employing unit which at the time of such acquisition was an employer subject to
this act;
(B) any employing unit which is controlled substantially, either directly or indirectly by
legally enforceable means or otherwise, by the same interest or interests, whether or not
such interest or interests are an employing unit under subsection (g) of this section, which
acquires or in any manner succeeds to a portion of an employer's annual payroll, which is
less than 100% of such employer's annual payroll, and which intends to continue the ac-
quired portion as a going business.
(5) Any employing unit which paid cash remuneration of $1,000 or more in any calendar
quarter in the current or preceding calendar year to individuals employed in domestic serv-
ice as defined in subsection (aa) of this section.
(6) Any employing unit which having become an employer under this subsection (h)
has not, under subsection (b) of K.S.A. 44-711 and amendments thereto, ceased to be an
employer subject to this act.
(7) Any employing unit which has elected to become fully subject to this act in accord-
ance with subsection (c) of K.S.A. 44-711 and amendments thereto.
(8) Any employing unit not an employer by reason of any other paragraph of this sub-
section (h), for which within either the current or preceding calendar year services in em-
ployment are or were performed with respect to which such employing unit is liable for any
federal tax against which credit may be taken for contributions required to be paid into a
state unemployment compensation fund; or which, as a condition for approval of this act
for full tax credit against the tax imposed by the federal unemployment tax act, is required,
pursuant to such act, to be an ``employer'' under this act.
(9) Any employing unit described in section 501(c)(3) of the federal internal revenue
code of 1986 which is exempt from income tax under section 501(a) of the code that had
four or more individuals in employment for some portion of a day in each of 20 different
weeks, whether or not such weeks were consecutive, within either the current or preceding
calendar year, regardless of whether they were employed at the same moment of time.
(i) ``Employment'' means:
(1) Subject to the other provisions of this subsection, service, including service in in-
terstate commerce, performed by
(A) Any active officer of a corporation; or
(B) any individual who, under the usual common law rules applicable in determining
the employer-employee relationship, has the status of an employee; or
(C) any individual other than an individual who is an employee under subsection
(i)(1)(A) or subsection (i)(1)(B) above who performs services for remuneration for any per-
son:
(i) As an agent-driver or commission-driver engaged in distributing meat products, veg-
etable products, fruit products, bakery products, beverages (other than milk), or laundry or
dry-cleaning services, for such individual's principal; or
(ii) as a traveling or city salesman, other than as an agent-driver or commission-driver,
engaged upon a full-time basis in the solicitation on behalf of, and the transmission to, a
principal (except for side-line sales activities on behalf of some other person) of orders from
wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar estab-
lishments for merchandise for resale or supplies for use in their business operations.
For purposes of subsection (i)(1)(D), the term ``employment'' shall include services de-
scribed in paragraphs (i) and (ii) above only if:
(a) The contract of service contemplates that substantially all of the services are to be
performed personally by such individual;
(b) the individual does not have a substantial investment in facilities used in connection
with the performance of the services (other than in facilities for transportation); and
(c) the services are not in the nature of a single transaction that is not part of a continuing
relationship with the person for whom the services are performed.
(2) The term ``employment'' shall include an individual's entire service within the United
States, even though performed entirely outside this state if,
(A) The service is not localized in any state, and
(B) the individual is one of a class of employees who are required to travel outside this
state in performance of their duties, and
(C) the individual's base of operations is in this state, or if there is no base of operations,
then the place from which service is directed or controlled is in this state.
(3) The term ``employment'' shall also include:
(A) Services performed within this state but not covered by the provisions of subsection
(i)(1) or subsection (i)(2) shall be deemed to be employment subject to this act if contri-
butions are not required and paid with respect to such services under an unemployment
compensation law of any other state or of the federal government.
(B) Services performed entirely without this state, with respect to no part of which
contributions are required and paid under an unemployment compensation law of any other
state or of the federal government, shall be deemed to be employment subject to this act
only if the individual performing such services is a resident of this state and the secretary
approved the election of the employing unit for whom such services are performed that the
entire service of such individual shall be deemed to be employment subject to this act.
(C) Services covered by an arrangement pursuant to subsection (l) of K.S.A. 44-714 and
amendments thereto between the secretary and the agency charged with the administration
of any other state or federal unemployment compensation law, pursuant to which all services
performed by an individual for an employing unit are deemed to be performed entirely
within this state, shall be deemed to be employment if the secretary has approved an election
of the employing unit for whom such services are performed, pursuant to which the entire
service of such individual during the period covered by such election is deemed to be insured
work.
(D) Services performed by an individual for wages or under any contract of hire shall
be deemed to be employment subject to this act unless and until it is shown to the satisfaction
of the secretary that: (i) Such individual has been and will continue to be free from control
or direction over the performance of such services, both under the individual's contract of
hire and in fact; and (ii) such service is either outside the usual course of the business for
which such service is performed or that such service is performed outside of all the places
of business of the enterprise for which such service is performed.
(E) Service performed by an individual in the employ of this state or any instrumentality
thereof, any political subdivision of this state or any instrumentality thereof, any instrumen-
tality of more than one of the foregoing or any instrumentality which is jointly owned by
this state or a political subdivision thereof and one or more other states or political subdi-
visions of this or other states, provided that such service is excluded from ``employment'' as
defined in the federal unemployment tax act by reason of section 3306(c)(7) of that act and
is not excluded from ``employment'' under subsection (i)(4)(A) of this section.
(F) Service performed by an individual in the employ of a religious, charitable, educa-
tional or other organization which is excluded from the term ``employment'' as defined in
the federal unemployment tax act solely by reason of section 3306(c)(8) of that act, and is
not excluded from employment under paragraphs (I) through (M) of subsection (i)(4).
(G) The term ``employment'' shall include the service of an individual who is a citizen
of the United States, performed outside the United States except in Canada, in the employ
of an American employer (other than service which is deemed ``employment'' under the
provisions of subsection (i)(2) or subsection (i)(3) or the parallel provisions of another state's
law), if:
(i) The employer's principal place of business in the United States is located in this
state; or
(ii) the employer has no place of business in the United States, but
(A) The employer is an individual who is a resident of this state; or
(B) the employer is a corporation which is organized under the laws of this state; or
(C) the employer is a partnership or a trust and the number of the partners or trustees
who are residents of this state is greater than the number who are residents of any other
state; or
(iii) none of the criteria of paragraphs (i) and (ii) above of this subsection (i)(3)(G) are
met but the employer has elected coverage in this state or, the employer having failed to
elect coverage in any state, the individual has filed a claim for benefits, based on such service,
under the law of this state.
(H) An ``American employer,'' for purposes of subsection (i)(3)(G), means a person who
is:
(i) An individual who is a resident of the United States; or
(ii) a partnership if 2/3 or more of the partners are residents of the United States; or
(iii) a trust, if all of the trustees are residents of the United States; or
(iv) a corporation organized under the laws of the United States or of any state.
(I) Notwithstanding subsection (i)(2) of this section, all service performed by an officer
or member of the crew of an American vessel or American aircraft on or in connection with
such vessel or aircraft, if the operating office, from which the operations of such vessel or
aircraft operating within, or within and without, the United States are ordinarily and regu-
larly supervised, managed, directed and controlled is within this state.
(J) Notwithstanding any other provisions of this subsection (i), service with respect to
which a tax is required to be paid under any federal law imposing a tax against which credit
may be taken for contributions required to be paid into a state unemployment compensation
fund or which as a condition for full tax credit against the tax imposed by the federal
unemployment tax act is required to be covered under this act.
(K) Domestic service in a private home, local college club or local chapter of a college
fraternity or sorority performed for a person who paid cash remuneration of $1,000 or more
in any calendar quarter in the current calendar year or the preceding calendar year to
individuals employed in such domestic service.
(4) The term ``employment'' shall not include: (A) Service performed in the employ of
an employer specified in subsection (h)(3) of this section if such service is performed by an
individual in the exercise of duties:
(i) As an elected official;
(ii) as a member of a legislative body, or a member of the judiciary, of a state or political
subdivision;
(iii) as a member of the state national guard or air national guard;
(iv) as an employee serving on a temporary basis in case of fire, storm, snow, earthquake,
flood or similar emergency;
(v) in a position which, under or pursuant to the laws of this state, is designated as a
major nontenured policymaking or advisory position or as a policymaking or advisory posi-
tion the performance of the duties of which ordinarily does not require more than eight
hours per week;
(B) service with respect to which unemployment compensation is payable under an
unemployment compensation system established by an act of congress;
(C) service performed by an individual in the employ of such individual's son, daughter
or spouse, and service performed by a child under the age of 21 years in the employ of such
individual's father or mother;
(D) service performed in the employ of the United States government or an instru-
mentality of the United States exempt under the constitution of the United States from the
contributions imposed by this act, except that to the extent that the congress of the United
States shall permit states to require any instrumentality of the United States to make pay-
ments into an unemployment fund under a state unemployment compensation law, all of
the provisions of this act shall be applicable to such instrumentalities, and to services per-
formed for such instrumentalities, in the same manner, to the same extent and on the same
terms as to all other employers, employing units, individuals and services. If this state shall
not be certified for any year by the federal security agency under section 3304(c) of the
federal internal revenue code of 1986, the payments required of such instrumentalities with
respect to such year shall be refunded by the secretary from the fund in the same manner
and within the same period as is provided in subsection (f) of K.S.A. 44-717 and amendments
thereto with respect to contributions erroneously collected;
(E) service covered by an arrangement between the secretary and the agency charged
with the administration of any other state or federal unemployment compensation law pur-
suant to which all services performed by an individual for an employing unit during the
period covered by such employing unit's duly approved election, are deemed to be per-
formed entirely within the jurisdiction of such other state or federal agency;
(F) service performed by an individual under the age of 18 in the delivery or distribution
of newspapers or shopping news, not including delivery or distribution to any point for
subsequent delivery or distribution;
(G) service performed by an individual for an employing unit as an insurance agent or
as an insurance solicitor, if all such service performed by such individual for such employing
unit is performed for remuneration solely by way of commission;
(H) service performed in any calendar quarter in the employ of any organization exempt
from income tax under section 501(a) of the federal internal revenue code of 1986 (other
than an organization described in section 401(a) or under section 521 of such code) if the
remuneration for such service is less than $50. In construing the application of the term
``employment,'' if services performed during 1/2 or more of any pay period by an individual
for the person employing such individual constitute employment, all the services of such
individual for such period shall be deemed to be employment; but if the services performed
during more than 1/2 of any such pay period by an individual for the person employing such
individual do not constitute employment, then none of the services of such individual for
such period shall be deemed to be employment. As used in this subsection (i)(4)(H) the
term ``pay period'' means a period (of not more than 31 consecutive days) for which a
payment of remuneration is ordinarily made to the individual by the person employing such
individual. This subsection (i)(4)(H) shall not be applicable with respect to services with
respect to which unemployment compensation is payable under an unemployment com-
pensation system established by an act of congress;
(I) services performed in the employ of a church or convention or association of
churches, or an organization which is operated primarily for religious purposes and which
is operated, supervised, controlled, or principally supported by a church or convention or
association of churches;
(J) service performed by a duly ordained, commissioned, or licensed minister of a
church in the exercise of such individual's ministry or by a member of a religious order in
the exercise of duties required by such order;
(K) service performed in a facility conducted for the purpose of carrying out a program
of:
(i) Rehabilitation for individuals whose earning capacity is impaired by age or physical
or mental deficiency or injury, or
(ii) providing remunerative work for individuals who because of their impaired physical
or mental capacity cannot be readily absorbed in the competitive labor market, by an in-
dividual receiving such rehabilitation or remunerative work;
(L) service performed as part of an employment work-relief or work-training program
assisted or financed in whole or in part by any federal agency or an agency of a state or
political subdivision thereof, by an individual receiving such work relief or work training;
(M) service performed by an inmate of a custodial or correctional institution, unless
such service is performed for a private, for-profit employer;
(N) service performed, in the employ of a school, college, or university, if such service
is performed by a student who is enrolled and is regularly attending classes at such school,
college or university;
(O) service performed by an individual who is enrolled at a nonprofit or public educa-
tional institution which normally maintains a regular faculty and curriculum and normally
has a regularly organized body of students in attendance at the place where its educational
activities are carried on as a student in a full-time program, taken for credit at such insti-
tution, which combines academic instruction with work experience, if such service is an
integral part of such program, and such institution has so certified to the employer, except
that this subsection (i)(4)(O) shall not apply to service performed in a program established
for or on behalf of an employer or group of employers;
(P) service performed in the employ of a hospital licensed, certified or approved by the
secretary of health and environment, if such service is performed by a patient of the hospital;
(Q) services performed as a qualified real estate agent. As used in this subsection
(i)(4)(Q) the term ``qualified real estate agent'' means any individual who is licensed by the
Kansas real estate commission as a salesperson under the real estate brokers' and salesper-
sons' license act and for whom:
(i) Substantially all of the remuneration, whether or not paid in cash, for the services
performed by such individual as a real estate salesperson is directly related to sales or other
output, including the performance of services, rather than to the number of hours worked;
and
(ii) the services performed by the individual are performed pursuant to a written con-
tract between such individual and the person for whom the services are performed and such
contract provides that the individual will not be treated as an employee with respect to such
services for state tax purposes;
(R) services performed for an employer by an extra in connection with any phase of
motion picture or television production or television commercials for less than 14 days
during any calendar year. As used in this subsection, the term ``extra'' means an individual
who pantomimes in the background, adds atmosphere to the set and performs such actions
without speaking and ``employer'' shall not include any employer which is a governmental
entity or any employer described in section 501(c)(3) of the federal internal revenue code
of 1986 which is exempt from income under section 501(a) of the code;
(S) services performed by an oil and gas contract pumper. As used in this subsection
(i)(4)(S), ``oil and gas contract pumper'' means a person performing pumping and other
services on one or more oil or gas leases, or on both oil and gas leases, relating to the
operation and maintenance of such oil and gas leases, on a contractual basis for the operators
of such oil and gas leases and ``services'' shall not include services performed for a govern-
mental entity or any organization described in section 501(c)(3) of the federal internal rev-
enue code of 1986 which is exempt from income taxation under section 501(a) of the code;
(T) service not in the course of the employer's trade or business performed in any
calendar quarter by an employee, unless the cash remuneration paid for such service is $200
or more and such service is performed by an individual who is regularly employed by such
employer to perform such service. For purposes of this paragraph, an individual shall be
deemed to be regularly employed by an employer during a calendar quarter only if:
(i) On each of some 24 days during such quarter such individual performs for such
employer for some portion of the day service not in the course of the employer's trade or
business, or
(ii) such individual was regularly employed, as determined under subparagraph (i), by
such employer in the performance of such service during the preceding calendar quarter.
Such excluded service shall not include any services performed for an employer which is
a governmental entity or any employer described in section 501(c)(3) of the federal internal
revenue code of 1986 which is exempt from income taxation under section 501(a) of the
code;
(U) service which is performed by any person who is a member of a limited liability
company and which is performed as a member or manager of that limited liability company;
and
(V) services performed as a qualified direct seller. The term ``direct seller'' means any
person if:
(i) Such person:
(aa) is engaged in the trade or business of selling or soliciting the sale of consumer
products to any buyer on a buy-sell basis or a deposit-commission basis for resale, by the
buyer or any other person, in the home or otherwise rather than in a permanent retail
establishment; or
(bb) is engaged in the trade or business of selling or soliciting the sale of consumer
products in the home or otherwise than in a permanent retail establishment;
(ii) substantially all the remuneration whether or not paid in cash for the performance
of the services described in subparagraph (i) is directly related to sales or other output
including the performance of services rather than to the number of hours worked;
(iii) the services performed by the person are performed pursuant to a written contract
between such person and the person for whom the services are performed and such contract
provides that the person will not be treated as an employee for federal and state tax purposes; and
(iv) for purposes of this act, a sale or a sale resulting exclusively from a solicitation made
by telephone, mail, or other telecommunications method, or other nonpersonal method
does not satisfy the requirements of this subsection.; and
(W) service performed as an election official or election worker, if the amount of re- muneration received by the individual during the calendar year for services as an election official or election worker is less than $1,000.
(j) ``Employment office'' means any office operated by this state and maintained by the
secretary of human resources for the purpose of assisting persons to become employed.
(k) ``Fund'' means the employment security fund established by this act, to which all
contributions and reimbursement payments required and from which all benefits provided
under this act shall be paid and including all money received from the federal government
as reimbursements pursuant to section 204 of the federal-state extended compensation act
of 1970, and amendments thereto.
(l) ``State'' includes, in addition to the states of the United States of America, any de-
pendency of the United States, the Commonwealth of Puerto Rico, the District of Columbia
and the Virgin Islands.
(m) ``Unemployment.'' An individual shall be deemed ``unemployed'' with respect to
any week during which such individual performs no services and with respect to which no
wages are payable to such individual, or with respect to any week of less than full-time work
if the wages payable to such individual with respect to such week are less than such indi-
vidual's weekly benefit amount.
(n) ``Employment security administration fund'' means the fund established by this act,
from which administrative expenses under this act shall be paid.
(o) ``Wages'' means all compensation for services, including commissions, bonuses, back
pay and the cash value of all remuneration, including benefits, paid in any medium other
than cash. The reasonable cash value of remuneration in any medium other than cash, shall
be estimated and determined in accordance with rules and regulations prescribed by the
secretary. Compensation payable to an individual which has not been actually received by
that individual within 21 days after the end of the pay period in which the compensation
was earned shall be considered to have been paid on the 21st day after the end of that pay
period. Effective January 1, 1986, gratuities, including tips received from persons other than
the employing unit, shall be considered wages when reported in writing to the employer by
the employee. Employees must furnish a written statement to the employer, reporting all
tips received if they total $20 or more for a calendar month whether the tips are received
directly from a person other than the employer or are paid over to the employee by the
employer. This includes amounts designated as tips by a customer who uses a credit card
to pay the bill. Notwithstanding the other provisions of this subsection (o), wages paid in
back pay awards or settlements shall be allocated to the week or weeks and reported in the
manner as specified in the award or agreement, or, in the absence of such specificity in the
award or agreement, such wages shall be allocated to the week or weeks in which such
wages, in the judgment of the secretary, would have been paid. The term ``wages'' shall not
include:
(1) That part of the remuneration which has been paid in a calendar year to an individual
by an employer or such employer's predecessor in excess of $3,000 for all calendar years
prior to 1972, $4,200 for the calendar years 1972 to 1977, inclusive, $6,000 for calendar
years 1978 to 1982, inclusive, $7,000 for the calendar year 1983, and $8,000 with respect
to employment during any calendar year following 1983, except that if the definition of the
term ``wages'' as contained in the federal unemployment tax act is amended to include
remuneration in excess of $8,000 paid to an individual by an employer under the federal
act during any calendar year, wages shall include remuneration paid in a calendar year to
an individual by an employer subject to this act or such employer's predecessor with respect
to employment during any calendar year up to an amount equal to the dollar limitation
specified in the federal unemployment tax act. For the purposes of this subsection (o)(1),
the term ``employment'' shall include service constituting employment under any employ-
ment security law of another state or of the federal government;
(2) the amount of any payment (including any amount paid by an employing unit for
insurance or annuities, or into a fund, to provide for any such payment) made to, or on
behalf of, an employee or any of such employee's dependents under a plan or system es-
tablished by an employer which makes provisions for employees generally, for a class or
classes of employees or for such employees or a class or classes of employees and their
dependents, on account of (A) sickness or accident disability, except in the case of any
payment made to an employee or such employee's dependents, this subparagraph shall
exclude from the term ``wages'' only payments which are received under a workers com-
pensation law. Any third party which makes a payment included as wages by reason of this
subparagraph (2)(A) shall be treated as the employer with respect to such wages, or (B)
medical and hospitalization expenses in connection with sickness or accident disability, or
(C) death;
(3) any payment on account of sickness or accident disability, or medical or hospitali-
zation expenses in connection with sickness or accident disability, made by an employer to,
or on behalf of, an employee after the expiration of six calendar months following the last
calendar month in which the employee worked for such employer;
(4) any payment made to, or on behalf of, an employee or such employee's beneficiary:
(A) From or to a trust described in section 401(a) of the federal internal revenue code
of 1986 which is exempt from tax under section 501(a) of the federal internal revenue code
of 1986 at the time of such payment unless such payment is made to an employee of the
trust as remuneration for services rendered as such employee and not as a beneficiary of
the trust;
(B) under or to an annuity plan which, at the time of such payment, is a plan described
in section 403(a) of the federal internal revenue code of 1986;
(C) under a simplified employee pension as defined in section 408(k)(1) of the federal
internal revenue code of 1986, other than any contribution described in section 408(k)(6)
of the federal internal revenue code of 1986;
(D) under or to an annuity contract described in section 403(b) of the federal internal
revenue code of 1986, other than a payment for the purchase of such contract which was
made by reason of a salary reduction agreement whether evidenced by a written instrument
or otherwise;
(E) under or to an exempt governmental deferred compensation plan as defined in
section 3121(v)(3) of the federal internal revenue code of 1986;
(F) to supplement pension benefits under a plan or trust described in any of the fore-
going provisions of this subparagraph to take into account some portion or all of the increase
in the cost of living, as determined by the secretary of labor, since retirement but only if
such supplemental payments are under a plan which is treated as a welfare plan under
section 3(2)(B)(ii) of the federal employee retirement income security act of 1974; or
(G) under a cafeteria plan within the meaning of section 125 of the federal internal
revenue code of 1986;
(5) the payment by an employing unit (without deduction from the remuneration of the
employee) of the tax imposed upon an employee under section 3101 of the federal internal
revenue code of 1986 with respect to remuneration paid to an employee for domestic service
in a private home of the employer or for agricultural labor;
(6) remuneration paid in any medium other than cash to an employee for service not
in the course of the employer's trade or business;
(7) remuneration paid to or on behalf of an employee if and to the extent that at the
time of the payment of such remuneration it is reasonable to believe that a corresponding
deduction is allowable under section 217 of the federal internal revenue code of 1986 re-
lating to moving expenses;
(8) any payment or series of payments by an employer to an employee or any of such
employee's dependents which is paid:
(A) Upon or after the termination of an employee's employment relationship because
of (i) death or (ii) retirement for disability; and
(B) under a plan established by the employer which makes provisions for employees
generally, a class or classes of employees or for such employees or a class or classes of
employees and their dependents, other than any such payment or series of payments which
would have been paid if the employee's employment relationship had not been so termi-
nated;
(9) remuneration for agricultural labor paid in any medium other than cash;
(10) any payment made, or benefit furnished, to or for the benefit of an employee if at
the time of such payment or such furnishing it is reasonable to believe that the employee
will be able to exclude such payment or benefit from income under section 129 of the
federal internal revenue code of 1986 which relates to dependent care assistance programs;
(11) the value of any meals or lodging furnished by or on behalf of the employer if at
the time of such furnishing it is reasonable to believe that the employee will be able to
exclude such items from income under section 119 of the federal internal revenue code of
1986;
(12) any payment made by an employer to a survivor or the estate of a former employee
after the calendar year in which such employee died; or
(13) any benefit provided to or on behalf of an employee if at the time such benefit is
provided it is reasonable to believe that the employee will be able to exclude such benefit
from income under section 74(c), 117 or 132 of the federal internal revenue code of 1986.; or
(14) any payment made, or benefit furnished, to or for the benefit of an employee, if at the time of such payment or such furnishing it is reasonable to believe that the employee will be able to exclude such payment or benefit from income under section 127 of the federal internal revenue code of 1986 relating to educational assistance to the employee.
Nothing in any paragraph of subsection (o), other than paragraph (1), shall exclude from
the term ``wages'': (1) Any employer contribution under a qualified cash or deferred ar-
rangement, as defined in section 401(k) of the federal internal revenue code of 1986, to the
extent that such contribution is not included in gross income by reason of section 402(a)(8)
of the federal internal revenue code of 1986; or (2) any amount treated as an employer
contribution under section 414(h)(2) of the federal internal revenue code of 1986.
Any amount deferred under a nonqualified deferred compensation plan shall be taken
into account for purposes of this section as of the later of when the services are performed
or when there is no substantial risk of forfeiture of the rights to such amount. Any amount
taken into account as wages by reason of this paragraph, and the income attributable thereto,
shall not thereafter be treated as wages for purposes of this section. For purposes of this
paragraph, the term ``nonqualified deferred compensation plan'' means any plan or other
arrangement for deferral of compensation other than a plan described in subsection (o)(4).
(p) ``Week'' means such period or periods of seven consecutive calendar days, as the
secretary may by rules and regulations prescribe.
(q) ``Calendar quarter'' means the period of three consecutive calendar months ending
March 31, June 30, September 30 or December 31, or the equivalent thereof as the secretary
may by rules and regulations prescribe.
(r) ``Insured work'' means employment for employers.
(s) ``Approved training'' means any vocational training course or course in basic edu-
cation skills approved by the secretary or a person or persons designated by the secretary.
(t) ``American vessel'' or ``American aircraft'' means any vessel or aircraft documented
or numbered or otherwise registered under the laws of the United States; and any vessel or
aircraft which is neither documented or numbered or otherwise registered under the laws
of the United States nor documented under the laws of any foreign country, if its crew
performs service solely for one or more citizens or residents of the United States or cor-
porations organized under the laws of the United States or of any state.
(u) ``Institution of higher education,'' for the purposes of this section, means an edu-
cational institution which:
(1) Admits as regular students only individuals having a certificate of graduation from
a high school, or the recognized equivalent of such a certificate;
(2) is legally authorized in this state to provide a program of education beyond high
school;
(3) provides an educational program for which it awards a bachelor's or higher degree,
or provides a program which is acceptable for full credit toward such a degree, a program
of postgraduate or postdoctoral studies, or a program of training to prepare students for
gainful employment in a recognized occupation; and
(4) is a public or other nonprofit institution.
Notwithstanding any of the foregoing provisions of this subsection (u), all colleges and
universities in this state are institutions of higher education for purposes of this section,
except that no college, university, junior college or other postsecondary school or institution
which is operated by the federal government or any agency thereof shall be an institution
of higher education for purposes of the employment security law.
(v) ``Educational institution'' means any institution of higher education, as defined in
subsection (u) of this section, or any institution, except private for profit institutions, in
which participants, trainees or students are offered an organized course of study or training
designed to transfer to them knowledge, skills, information, doctrines, attitudes or abilities
from, by or under the guidance of an instructor or teacher and which is approved, licensed
or issued a permit to operate as a school by the state department of education or other
government agency that is authorized within the state to approve, license or issue a permit
for the operation of a school. The courses of study or training which an educational insti-
tution offers may be academic, technical, trade or preparation for gainful employment in a
recognized occupation.
(w) (1) ``Agricultural labor'' means any remunerated service:
(A) On a farm, in the employ of any person, in connection with cultivating the soil, or
in connection with raising or harvesting any agricultural or horticultural commodity, includ-
ing the raising, shearing, feeding, caring for, training, and management of livestock, bees,
poultry, and furbearing animals and wildlife.
(B) In the employ of the owner or tenant or other operator of a farm, in connection
with the operating, management, conservation, improvement, or maintenance of such farm
and its tools and equipment, or in salvaging timber or clearing land of brush and other debris
left by a hurricane, if the major part of such service is performed on a farm.
(C) In connection with the production or harvesting of any commodity defined as an
agricultural commodity in section (15)(g) of the agricultural marketing act, as amended (46
Stat. 1500, sec. 3; 12 U.S.C. 1141j) or in connection with the ginning of cotton, or in
connection with the operation or maintenance of ditches, canals, reservoirs or waterways,
not owned or operated for profit, used exclusively for supplying and storing water for farming
purposes.
(D) (i) In the employ of the operator of a farm in handling, planting, drying, packing,
packaging, processing, freezing, grading, storing, or delivering to storage or to market or to
a carrier for transportation to market, in its unmanufactured state, any agricultural or hor-
ticultural commodity; but only if such operator produced more than 1/2 of the commodity
with respect to which such service is performed;
(ii) in the employ of a group of operators of farms (or a cooperative organization of
which such operators are members) in the performance of service described in paragraph
(i) above of this subsection (w)(1)(D), but only if such operators produced more than 1/2 of
the commodity with respect to which such service is performed;
(iii) the provisions of paragraphs (i) and (ii) above of this subsection (w)(1)(D) shall not
be deemed to be applicable with respect to service performed in connection with commer-
cial canning or commercial freezing or in connection with any agricultural or horticultural
commodity after its delivery to a terminal market for distribution for consumption.
(E) On a farm operated for profit if such service is not in the course of the employer's
trade or business.
(2) ``Agricultural labor'' does not include service performed prior to January 1, 1980, by
an individual who is an alien admitted to the United States to perform service in agricultural
labor pursuant to sections 214(c) and 101(a)(15)(H) of the federal immigration and nation-
ality act.
(3) As used in this subsection (w), the term ``farm'' includes stock, dairy, poultry, fruit,
fur-bearing animal, and truck farms, plantations, ranches, nurseries, ranges, greenhouses,
or other similar structures used primarily for the raising of agricultural or horticultural
commodities, and orchards.
(4) For the purpose of this section, if an employing unit does not maintain sufficient
records to separate agricultural labor from other employment, all services performed during
any pay period by an individual for the person employing such individual shall be deemed
to be agricultural labor if services performed during 1/2 or more of such pay period constitute
agricultural labor; but if the services performed during more than 1/2 of any such pay period
by an individual for the person employing such individual do not constitute agricultural
labor, then none of the services of such individual for such period shall be deemed to be
agricultural labor. As used in this subsection (w), the term ``pay period'' means a period of
not more than 31 consecutive days for which a payment of remuneration is ordinarily made
to the individual by the person employing such individual.
(x) ``Reimbursing employer'' means any employer who makes payments in lieu of con-
tributions to the employment security fund as provided in subsection (e) of K.S.A. 44-710
and amendments thereto.
(y) ``Contributing employer'' means any employer other than a reimbursing employer
or rated governmental employer.
(z) ``Wage combining plan'' means a uniform national arrangement approved by the
United States secretary of labor in consultation with the state unemployment compensation
agencies and in which this state shall participate, whereby wages earned in one or more
states are transferred to another state, called the ``paying state,'' and combined with wages
in the paying state, if any, for the payment of benefits under the laws of the paying state
and as provided by an arrangement so approved by the United States secretary of labor.
(aa) ``Domestic service'' means any service for a person in the operation and mainte-
nance of a private household, local college club or local chapter of a college fraternity or
sorority, as distinguished from service as an employee in the pursuit of an employer's trade,
occupation, profession, enterprise or vocation.
(bb) ``Rated governmental employer'' means any governmental entity which elects to
make payments as provided by K.S.A. 44-710d and amendments thereto.
(cc) ``Benefit cost payments'' means payments made to the employment security fund
by a governmental entity electing to become a rated governmental employer.
(dd) ``Successor employer'' means any employer, as described in subsection (h) of this
section, which acquires or in any manner succeeds to (1) substantially all of the employing
enterprises, organization, trade or business of another employer or (2) substantially all the
assets of another employer.
(ee) ``Predecessor employer'' means an employer, as described in subsection (h) of this
section, who has previously operated a business or portion of a business with employment
to which another employer has succeeded.
(ff) ``Lessor employing unit'' means any independently established business entity which
engages in the business of providing leased employees to a client lessee.
(gg) ``Client lessee'' means any individual, organization, partnership, corporation or
other legal entity leasing employees from a lessor employing unit.'';
And by renumbering the sections accordingly;
On page 2, after line 31, by inserting additional sections as follows:
``Sec. 3. K.S.A. 1997 Supp. 44-712 is hereby amended to read as follows: 44-712. (a) Establishment and control. There is hereby established as a special fund in the state treasury,
separate and apart from all public moneys or funds of this state, an employment security
fund, which shall be administered by the secretary as provided in this act. This fund shall
consist of: (1) All contributions collected under this act; (2) interest earned upon any moneys
in the fund; (3) all moneys credited to this state's account in the federal unemployment trust
fund, pursuant to section 903 of the social security act, 42 U.S.C.A. § 1103, as amended;
(4) any property or securities acquired through the use of moneys belonging to the fund,
and all other moneys received for the fund from any other source; (5) all earnings of such
property or securities. All moneys in this fund shall be mingled and undivided.
(b) Accounts and deposits. The state treasurer shall be ex officio custodian of the fund.
Payments from the fund, and for the purposes of this act deposits with the secretary of the
treasury of the United States shall not be deemed to be payments from the fund, shall be
made upon warrants drawn upon the state treasurer by the director of accounts and reports
upon vouchers approved by the secretary. There shall be maintained within the fund three
separate accounts: (1) A clearing account; (2) an unemployment trust fund account, and (3)
a benefit account. All money payable to the fund upon receipt thereof by the secretary, shall
be forwarded to the state treasurer, who shall immediately deposit them in the state treasury
to the credit of the clearing account of the fund. Refunds payable pursuant to K.S.A. 44-
717 and amendments thereto may be paid from the clearing account of the fund by warrants
drawn by the director of accounts and reports upon the state treasurer upon vouchers
approved by the secretary. After clearance thereof, all other moneys in the clearing account
of the fund shall be immediately deposited with the secretary of the treasury of the United
States of America to the credit of the account of this state in the federal unemployment
trust fund established and maintained pursuant to section 904 of the social security act, 42
U.S.C.A. § 1104, as amended, any provisions of law in this state relating to the deposit,
administration, release, or disbursement of moneys in the possession or custody of this state
to the contrary notwithstanding. The benefit account of the fund shall consist of all moneys
requisitioned from this state's account in the federal unemployment trust fund. Except as
herein otherwise provided, moneys in the clearing and benefit accounts of the fund may be
deposited by the state treasurer in any bank or public depository as is now provided by law
for the deposit of general funds of the state, but no public deposit insurance charge or
premium shall be paid out of the fund. Moneys in the clearing and benefit accounts of the
fund shall not be commingled with other state funds and shall be maintained in separate
bank accounts.
(c) Withdrawals. Moneys shall be requisitioned from this state's account in the federal
unemployment trust fund solely for the payment of benefits and in accordance with the
provisions of this act and the rules and regulations adopted by the secretary, except that
moneys credited to this state's account pursuant to section 903 of the social security act, 42
U.S.C.A. § 1103, as amended, shall be used exclusively as provided in subsection (d) of this
section. The secretary shall from time to time requisition from the federal unemployment
trust fund such amounts, not exceeding the amounts standing to its account therein, as
deemed necessary for the payment of benefits for a reasonable future period. Upon receipt
thereof the state treasurer shall deposit such moneys in the benefit account of the fund and
warrants for the payment of benefits shall be charged solely against such benefit account of
the fund. Expenditures of such moneys in the benefit account and refunds from the clearing
account of the fund shall not be subject to any provisions of law requiring specific appro-
priations. Any balance of moneys requisitioned from the federal unemployment trust fund
which remains unclaimed or unpaid in the benefit account of the fund after the expiration
of the period for which such sums were requisitioned shall either be deducted from estimates
for, and may be utilized for the payment of benefits during succeeding periods, or, in the
discretion of the secretary shall be directed to be redeposited with the secretary of the
treasury of the United States of America, to the credit of this state's account in the federal
unemployment trust fund, as provided in subsection (b) of this section. All balances accrued
from unpaid or canceled warrants issued pursuant to this section, notwithstanding the pro-
visions of K.S.A. 10-812 and amendments thereto shall remain in the benefit account of the
fund, and be disbursed in accordance with the provisions of this act relating to such account.
(d) Administrative use. (1) Money credited to the account of this state in the federal
unemployment trust fund by the secretary of the treasury of the United States of America,
pursuant to section 903 of the social security act, 42 U.S.C.A. § 1103, as amended, may be
requisitioned and used for the payment of expenses incurred in the administration of this
act pursuant to a specific appropriation by the legislature, if expenses are incurred and the
money is requisitioned after the enactment of an appropriation law which: (A) Specifies the
purposes for which such money is appropriated and the amounts appropriated therefor, (B)
limits the period within which such money may be obligated to a period ending not more
than two years after the date of the enactment of the appropriation law, and (C) limits the
amount which may be obligated during a twelve-month period beginning on July 1 and
ending on the next June 30 to an amount which does not exceed the amount by which (i)
the aggregate of the amounts credited to the account of this state pursuant to section 903
of the social security act, 42 U.S.C.A. § 1103, as amended, (ii) the aggregate of the amounts
obligated pursuant to this subsection and amounts paid out for benefits and charged against
the amounts credited to the account of this state. For the purposes of this subsection,
amounts obligated during any such twelve-month period shall be charged against equivalent
amounts which were first credited and which are not already so charged.
(2) Money credited to the account of this state pursuant to section 903 of the social
security act, 42 U.S.C.A. § 1103, as amended, may not be withdrawn or obligated except
for the payment of benefits and for the payment of expenses for the administration of this
act and of public employment offices pursuant to this subsection (d).
(3) Money appropriated as provided by this subsection (d) for the payment of expenses
of administration shall be requisitioned as needed for the payment of obligations incurred
under such appropriation and, upon requisition shall be deposited in the state treasury to
the credit of the employment security administration fund from which such payments shall
be made. Money so deposited and credited shall, until expended, remain a part of the federal
unemployment trust fund, and, if it will not be expended, shall be returned promptly to the
account of this state in the federal unemployment trust fund.
(4) Notwithstanding paragraph (1), money credited with respect to federal fiscal years 1999, 2000 and 2001, shall be used solely for the administration of the UC program, and such money shall not otherwise be subject to the requirements of paragraph (1) when ap- propriated by the legislature.
(e) Management of funds upon discontinuance of federal unemployment trust fund. The
provisions of subsections (a), (b), (c) and (d) of this section, to the extent that they relate to
the federal unemployment trust fund, shall be operative only so long as such unemployment
trust fund continues to exist and so long as the secretary of the treasury of the United States
of America continues to maintain for this state a separate book account of all funds deposited
therein by this state for benefit purposes, together with this state's proportionate share of
the earnings of such unemployment trust fund, from which no other state is permitted to
make withdrawals. If and when such unemployment trust fund ceases to exist, or such
separate book account is no longer maintained, all moneys, properties or securities therein,
belonging to the employment security fund of this state, shall be transferred to the state
treasurer, to be administered by the secretary as a trust fund for the purpose of paying
benefits under this act, and the director of investments upon the direction of the secretary
shall have authority to hold, invest, transfer, sell, deposit, and release such moneys, and any
properties, securities, or earnings acquired as an incident to such administration.
Sec. 4. K.S.A. 44-716a is hereby amended to read as follows: 44-716a. (a) There is
hereby created in the state treasury a special fund to be known as the special employment
security fund. All interest and penalties collected under the provisions of the Kansas em-
ployment security law shall be paid into this fund. No such moneys shall be expended or
available for expenditure in any manner which would permit their substitution for, or a
corresponding reduction in, federal funds which in the absence of such moneys would be
available to finance expenditures for the administration of the employment security law.
Nothing in this section shall prevent such moneys from being used as a revolving fund, to
cover expenditures, necessary and proper under the law, for which federal funds have been
duly requested but not yet received, subject to the charging of such expenditures against
such funds when received. Except as otherwise authorized by this section or by appropria-
tions act, the moneys in this fund may be used by the secretary of human resources only
for the payment of costs of administration which are found not to have been properly and
validly chargeable against federal grants, or other funds, received for or in the employment
security administration fund. In addition to the other purposes for which expenditures may
be made from the special employment security fund as authorized by this section or by
appropriations act, moneys from this fund may be used to finance activities as deemed
necessary by the secretary of human resources for the efficient operation of activities under
or the administration of the employment security law, except that (1) no moneys shall be
used for such purposes unless the secretary has determined that no other funds are available
or can be properly used to finance expenditures for such purposes, and (2) expenditures
during any fiscal year for purposes authorized under this section shall not exceed $110,000
except upon approval of the state finance council acting on this matter which is hereby
characterized as a matter of legislative delegation and subject to the guidelines prescribed
by subsection (c) of K.S.A. 75-3711c and amendments thereto. No expenditures of this fund
shall be made except on written authorization by the governor and the secretary of human
resources.
(b) The director of accounts and reports is hereby directed to draw warrants upon the
state treasurer against the money in the special employment security fund for the use and
purposes authorized under this section upon vouchers, approved by the secretary of human
resources, and accompanied by the written authorization of the governor and the secretary
of human resources. The moneys in this fund are hereby specifically made available to
replace, within a reasonable time, any moneys received by this state pursuant to section 302
of the federal social security act, as amended, which, because of any action or contingency,
have been lost or have been expended for purposes other than, or in amounts in excess of,
those necessary for the proper administration of the employment security law. The moneys
in this fund shall be continuously available to the secretary of human resources for expend-
iture in accordance with the provisions of this section and shall not lapse at any time or be
transferred to any other fund, except as otherwise authorized in subsection (c) or subsection
(d).
(c) In addition to expenditures authorized by this section, the director of accounts and
reports may transfer funds from the special employment security fund to the accounting
services recovery fund as provided in K.S.A. 75-3728b and 75-6210 and amendments
thereto.
(d) In addition to expenditures authorized by this section, the director of accounts and
reports is directed and authorized to transfer funds from the special employment security
fund to the department of human resources federal indirect cost offset fund on July 1 of
each year in the amount contained in appropriation bills to be expended from the federal
indirect cost offset fund for that fiscal year.
(e) In addition to expenditures authorized by this section, the director of accounts and reports is directed and authorized to transfer funds from the special employment security fund to the clearing account of the employment security fund to be expended in the payment of interest due employers from erroneously collected contributions or benefit cost payments as provided in subsection (h) of K.S.A. 44-717 and amendments thereto.
Sec. 5 K.S.A. 1997 Supp. 44-717 is hereby amended to read as follows: 44-717. (a) Penalties on past-due reports, interest on past-due contributions, payments in lieu of con- tributions and benefit cost payments. Any employer or any officer or agent of an employer,
who fails to file any wage report or contribution return by the last day of the month following
the close of each calendar quarter to which they are related shall pay a penalty as provided
by this subsection (a) for each month or fraction of a month until the report or return is
received by the secretary of human resources. The penalty for each month or fraction of a
month shall be an amount equal to .05% of the total wages paid by the employer during
the quarter, except that no penalty shall be less than $25 nor more than $200 for each such
report or return not timely filed. Payments in lieu of contributions shall be filed by the last day of the month following the close of each calendar quarter to which they are related.
Contributions and benefit cost payments not filed unpaid by the last day of the month
following the last calendar quarter to which they are related and payments in lieu of con- tributions unpaid 30 days after the mailing of the statement of benefit charges, shall bear
interest at the rate of 1% per month or fraction of a month until payment is received by the
secretary of human resources except that an employing unit, which is not theretofore subject
to this law and which becomes an employer and does not refuse to make the reports, returns
and contributions, payments in lieu of contributions and benefit cost payments required
under this law, shall not be liable for such penalty or interest if the wage reports and
contribution returns required are filed and the contributions, payments in lieu of contri-
butions or benefit cost payments required are paid within 10 days following notification by
the secretary of human resources that a determination has been made fixing its status as an
employer subject to this law. Upon written request and good cause shown, the secretary of
human resources may abate any penalty or interest or portion thereof provided for by this
subsection (a). Interest amounting to less than $1 shall be waived by the secretary of human
resources and shall not be collected. Penalties and interest collected pursuant to this sub-
section shall be paid into the special employment security fund. For all purposes under this
section, amounts assessed as surcharges under subsection (j) or under K.S.A. 44-710a and
amendments thereto shall be considered to be contributions and shall be subject to penalties
and interest imposed under this section and to collection in the manner provided by this
section. A For purposes of this subsection, a wage report, a contribution return, a contri-
bution, a payment in lieu of contribution or a benefit cost payment is deemed to be filed or paid as of the date it is placed in the United States mail.
(b) Collection. (1) If, after due notice, any employer defaults in payment of any penalty,
contributions, payments in lieu of contributions, benefit cost payments, or interest thereon
the amount due may be collected by civil action in the name of the secretary of human
resources and the employer adjudged in default shall pay the cost of such action. Civil actions
brought under this section to collect contributions, payments in lieu of contributions, benefit
cost payments, penalties, or interest thereon from an employer shall be heard by the district
court at the earliest possible date and shall be entitled to preference upon the calendar of
the court over all other civil actions except petitions for judicial review under this act and
cases arising under the workmen's compensation act. All liability determinations of contri-
butions due, payments in lieu of contributions or benefit cost payments due shall be made
within a period of five years from the date such contributions, payments in lieu of contri-
butions or benefit cost payments were due except such determinations may be made for
any time when an employer has filed fraudulent reports with intent to evade liability.
(2) Any employing unit which is not a resident of this state and which exercises the
privilege of having one or more individuals perform service for it within this state and any
resident employing unit which exercises that privilege and thereafter removes from this
state, shall be deemed thereby to appoint the secretary of state as its agent and attorney for
the acceptance of process in any civil action under this subsection. In instituting such an
action against any such employing unit the secretary of human resources shall cause such
process or notice to be filed with the secretary of state and such service shall be sufficient
service upon such employing unit and shall be of the same force and validity as if served
upon it personally within this state. The secretary of human resources shall send notice
immediately of the service of such process or notice, together with a copy thereof, by
registered or certified mail, return receipt requested, to such employing unit at its last-
known address and such return receipt, the affidavit of compliance of the secretary of human
resources with the provisions of this section, and a copy of the notice of service, shall be
appended to the original of the process filed in the court in which such civil action is pending.
(3) Any contractor, who is or becomes an employer under the provisions of this act,
who contracts with any subcontractor, who also is or becomes an employer under the pro-
visions of this act, shall be directly liable for such contributions, penalties and interest due
from the subcontractor and the secretary of human resources shall have all of the remedies
of collection against the contractor under the provisions of this act as though the services
in question were performed directly for the contractor, unless the contractor requires the
subcontractor to provide a good and sufficient bond guaranteeing payment of all contribu-
tions, penalties and interest due or to become due with respect to wages paid for employ-
ment on the contract. For the purpose of this subsection (b)(3), the words, ``contractor'' and
``subcontractor'' mean and include individuals, partnerships, firms or corporations, or other
associations of persons engaged in the business of the construction, alteration, repairing,
dismantling or demolition of buildings, roads, bridges, viaducts, sewers, water and gas mains,
streets, disposal plants, water filters, tanks and towers, airports, dams, levees and canals, oil
and gas wells, water wells, pipelines, and every other type of structure, project, development
or improvement coming within the definition of real property.
(4) The district courts of this state shall entertain, in the manner provided in subsections
(b)(1), (b)(2) and (b)(3), actions to collect contributions, payments in lieu of contributions,
benefit cost payments and other amounts owed including interest thereon for which liability
has accrued under the employment security law of any other state or of the federal govern-
ment.
(c) Priorities under legal dissolutions or distributions. In the event of any distribution
of employer's assets pursuant to an order of any court under the laws of this state, including
but not limited to any probate proceeding, interpleader, receivership, assignment for benefit
of creditors, adjudicated insolvency, composition or similar proceedings, contributions or
payments in lieu of contributions then or thereafter due shall be paid in full from the moneys
which shall first come into the estate, prior to all other claims, except claims for wages of
not more than $250 to each claimant, earned within six months of the commencement of
the proceedings. In the event of an employer's adjudication in bankruptcy, judicially con-
firmed extension proposal, or composition, under the federal bankruptcy act of 1898, as
amended, contributions then or thereafter due shall be entitled to such priority as is provided
in that act for taxes due any state of the United States.
(d) Assessments. If any employer fails to file a report or return required by the secretary
of human resources for the determination of contributions, or payments in lieu of contri-
butions, or benefit cost payments, the secretary of human resources may make such reports
or returns or cause the same to be made, on the basis of such information as the secretary
may be able to obtain and shall collect the contributions, payments in lieu of contributions
or benefit cost payments as determined together with any interest due under this act. The
secretary of human resources shall immediately forward to the employer a copy of the
assessment by registered or certified mail to the employer's address as it appears on the
records of the agency, and such assessment shall be final unless the employer protests such
assessment and files a corrected report or return for the period covered by the assessment
within 15 days after the mailing of the copy of assessment. Failure to receive such notice
shall not invalidate the assessment. Notice in writing shall be presumed to have been given
when deposited as certified or registered matter in the United States mail, addressed to the
person to be charged with notice at such person's address as it appears on the records of
the agency.
(e) (1) Lien. If any employer or person who is liable to pay contributions, payments in
lieu of contributions or benefit cost payments neglects or refuses to pay the same after
demand, the amount, including interest and penalty, shall be a lien in favor of the state of
Kansas, secretary of human resources, upon all property and rights to property, whether
real or personal, belonging to such employer or person. Such lien shall not be valid as against
any mortgagee, pledgee, purchaser or judgment creditor until notice thereof has been filed
by the secretary of human resources in the office of register of deeds in any county in the
state of Kansas, in which such property is located, and when so filed shall be notice to all
persons claiming an interest in the property of the employer or person against whom filed.
The register of deeds shall enter such notices in the financing statement record and shall
also record the same in full in miscellaneous record and index the same against the name
of the delinquent employer. The register of deeds shall accept, file, and record such notice
without prepayment of any fee, but lawful fees shall be added to the amount of such lien
and collected when satisfaction is presented for entry. Such lien shall be satisfied of record
upon the presentation of a certificate of discharge by the state of Kansas, secretary of human
resources. Nothing contained in this subsection (e) shall be construed as an invalidation of
any lien or notice filed in the name of the unemployment compensation division or the
employment security division and such liens shall be and remain in full force and effect
until satisfied as provided by this subsection (e).
(2) Authority of secretary or authorized representative. If any employer or person who
is liable to pay any contributions, payments in lieu of contributions or benefit cost payments,
including interest and penalty, neglects or refuses to pay the same within 10 days after
notice and demand therefor, the secretary or the secretary's authorized representative may
collect such contributions, payments in lieu of contributions or benefit cost payments, in-
cluding interest and penalty, and such further amount as is sufficient to cover the expenses
of the levy, by levy upon all property and rights to property which belong to the employer
or person or which have a lien created thereon by this subsection (e) for the payment of
such contributions, payments in lieu of contributions or benefit cost payments, including
interest and penalty. As used in this subsection (e), ``property'' includes all real property and
personal property, whether tangible or intangible, except such property which is exempt
under K.S.A. 60-2301 et seq., and amendments thereto. Levy may be made upon the accrued
salary or wages of any officer, employee or elected official of any state or local governmental
entity which is subject to K.S.A. 60-723 and amendments thereto, by serving a notice of
levy as provided in subsection (d) of K.S.A. 60-304 and amendments thereto. If the secretary
or the secretary's authorized representative makes a finding that the collection of the amount
of such contributions, payments in lieu of contributions or benefit cost payments, including
interest and penalty, is in jeopardy, notice and demand for immediate payment of such
amount may be made by the secretary or the secretary's authorized representative and, upon
failure or refusal to pay such amount, immediate collection of such amount by levy shall be
lawful without regard to the ten-day period provided in this subsection (e).
(3) Seizure and sale of property. The authority to levy granted under this subsection (e)
includes the power of seizure by any means. A levy shall extend only to property possessed
and obligations existing at the time thereof. In any case in which the secretary or the sec-
retary's authorized representative may levy upon property or rights to property, the secretary
or the secretary's authorized representative may seize and sell such property or rights to
property.
(4) Successive seizures. Whenever any property or right to property upon which levy
has been made under this subsection (e) is not sufficient to satisfy the claim of the secretary
for which levy is made, the secretary or the secretary's authorized representative may pro-
ceed thereafter and as often as may be necessary, to levy in like manner upon any other
property or rights to property which belongs to the employer or person against whom such
claim exists or upon which a lien is created by this subsection (e) until the amount due from
the employer or person, together with all expenses, is fully paid.
(f) Warrant. In addition or as an alternative to any other remedy provided by this section
and provided that no appeal or other proceeding for review permitted by this law shall then
be pending and the time for taking thereof shall have expired, the secretary of human
resources or an authorized representative of the secretary may issue a warrant certifying the
amount of contributions, payments in lieu of contributions, benefit cost payments, interest
or penalty, and the name of the employer liable for same after giving 15 days prior notice.
Upon request, service of final notices shall be made by the sheriff within the sheriff's county,
by the sheriff's deputy or some person specially appointed by the secretary for that purpose,
or by the secretary's designee. A person specially appointed by the secretary or the secre-
tary's designee to serve final notices may make service any place in the state. Final notices
shall be served as follows:
(1) Individual. Service upon an individual, other than a minor or incapacitated person,
shall be made by delivering a copy of the final notice to the individual personally or by
leaving a copy at such individual's dwelling house or usual place of abode with some person
of suitable age and discretion then residing therein, by leaving a copy at the business estab-
lishment of the employer with an officer or employee of the establishment, or by delivering
a copy to an agent authorized by appointment or by law to receive service of process, but
if the agent is one designated by a statute to receive service, such further notice as the
statute requires shall be given. If service as prescribed above cannot be made with due
diligence, the secretary or the secretary's designee may order service to be made by leaving
a copy of the final notice at the employer's dwelling house, usual place of abode or business
establishment.
(2) Corporations and partnerships. Service upon a domestic or foreign corporation or
upon a partnership or other unincorporated association, when by law it may be sued as such,
shall be made by delivering a copy of the final notice to an officer, partner or resident
managing or general agent thereof by leaving a copy at any business office of the employer
with the person having charge thereof or by delivering a copy to any other agent authorized
by appointment or required by law to receive service of process, if the agent is one author-
ized by law to receive service and, if the law so requires, by also mailing a copy to the
employer.
(3) Refusal to accept service. In all cases when the person to be served, or an agent
authorized by such person to accept service of petitions and summonses, shall refuse to
receive copies of the final notice, the offer of the duly authorized process server to deliver
copies thereof and such refusal shall be sufficient service of such notice.
(4) Proof of service. (A) Every officer to whom a final notice or other process shall be
delivered for service within or without the state, shall make return thereof in writing stating
the time, place and manner of service of such writ, and shall sign such officer's name to
such return.
(B) If service of the notice is made by a person appointed by the secretary or the
secretary's designee to make service, such person shall make an affidavit as to the time,
place and manner of service thereof in a form prescribed by the secretary or the secretary's
designee.
(5) Time for return. The officer or other person receiving a final notice shall make a
return of service promptly and shall send such return to the secretary or the secretary's
designee in any event within 10 days after the service is effected. If the final notice cannot
be served it shall be returned to the secretary or the secretary's designee within 30 days
after the date of issue with a statement of the reason for the failure to serve the same. The
original return shall be attached to and filed with any warrant thereafter filed.
(6) Service by mail. (A) Upon direction of the secretary or the secretary's designee,
service by mail may be effected by forwarding a copy of the notice to the employer by
registered or certified mail to the employer's address as it appears on the records of the
agency. A copy of the return receipt shall be attached to and filed with any warrant thereafter
filed.
(B) The secretary of human resources or an authorized representative of the secretary
may file the warrant for record in the office of the clerk of the district court in the county
in which the employer owing such contributions, payments in lieu of contributions, benefit
cost payments, interest, or penalty has business property. The warrant shall certify the
amount of contributions, payments in lieu of contributions, benefit cost payments, interest
and penalty due, and the name of the employer liable for such amount. It shall be the duty
of the clerk of the district court to file such warrant of record and enter the warrant in the
records of the district court for judgment and decrees under the procedure prescribed for
filing transcripts of judgment.
(C) The clerk shall enter, on the day the warrant is filed, the case on the appearance
docket, together with the amount and the time of filing the warrant. From the time of filing
such warrant, the amount of the contributions, payments in lieu of contributions, benefit
cost payments, interest, and penalty, certified therein, shall have the force and effect of a
judgment of the district court until the same is satisfied by the secretary of human resources
or an authorized representative or attorney for the secretary. Execution shall be issuable at
the request of the secretary of human resources, an authorized representative or attorney
for the secretary, as is provided in the case of other judgments.
(D) Postjudgment procedures shall be the same as for judgments according to the code
of civil procedure.
(E) Warrants shall be satisfied of record by payment to the clerk of the district court of
the contributions, payments in lieu of contributions, benefit cost payments, penalty, interest
to date, and court costs. Warrants may also be satisfied of record by payment to the clerk
of the district court of all court costs accrued in the case and by filing a certificate by the
secretary of human resources, certifying that the contributions, payments in lieu of contri-
butions, benefit cost payments, interest and penalty have been paid.
(g) Remedies cumulative. The foregoing remedies shall be cumulative and no action
taken shall be construed as an election on the part of the state or any of its officers to pursue
any remedy or action under this section to the exclusion of any other remedy or action for
which provision is made.
(h) Refunds. If any individual, governmental entity or organization makes application
for refund or adjustment of any amount paid as contributions, benefit cost payments or
interest under this law and the secretary of human resources determines that such amount
or any portion thereof was erroneously collected, except for amounts less than $1, the
secretary of human resources shall allow such individual or organization to make an adjust-
ment thereof, in connection with subsequent contribution payments, or if such adjustment
cannot be made the secretary of human resources shall refund the amount, except for
amounts less than $1, from the employment security fund, except that all interest errone-
ously collected which has been paid into the special employment security fund shall be
refunded out of the special employment security fund. No adjustment or refund shall be
allowed with respect to a payment as contributions, benefit cost payments or interest unless
an application therefor is made on or before whichever of the following dates is later: (1)
One year from the date on which such payment was made; or (2) three years from the last
day of the period with respect to which such payment was made. For like cause and within
the same period adjustment or refund may be so made on the secretary's own initiative.
The secretary of human resources shall not be required to refund any contributions, pay-
ments in lieu of contributions or benefit cost payments based upon wages paid which have
been used as base-period wages in a determination of a claimant's benefit rights when
justifiable and correct payments have been made to the claimant as the result of such
determination. For all taxable years commencing after December 31, 1997, interest at the
rate prescribed in K.S.A. 79-2968 and amendments thereto shall be allowed on a contri-
bution or benefit cost payment which the secretary has determined was erroneously col-
lected pursuant to this section. Such interest may be deducted from subsequent contribu- tions or as part of a refund as described in this subsection and in subsection (i).
(i) Refund for reimbursing employer.Upon termination of an employer's business or termination of any election to make payments in lieu of contributions, a reimbursing em- ployer may file for a refund of any payments made to the fund which are in excess of any regular or extended benefits which have been charged or could become chargeable to the reimbursing employer's account. No refund may be made within a twenty-four-month pe- riod following termination of a reimbursing employer's business or election for payments in lieu of contributions.
(j) (i) (1) Cash deposit or bond. If any contributing employer is delinquent in making
payments under the employment security law during any two quarters of the most recent
four-quarter period, the secretary or the secretary's authorized representative shall have the
discretionary power to require such contributing employer either to deposit cash or to file
a bond with sufficient sureties to guarantee the payment of contributions, penalty and in-
terest owed by such employer.
(2) The amount of such cash deposit or bond shall be not less than the largest total
amount of contributions, penalty and interest reported by the employer in two of the four
calendar quarters preceding any delinquency. Such cash deposit or bond shall be required
until the employer has shown timely filing of reports and payment of contributions for four
consecutive calendar quarters.
(3) Failure to file such cash deposit or bond shall subject the employer to a surcharge
of 2.0% which shall be in addition to the rate of contributions assigned to the employer
under K.S.A. 44-710a and amendments thereto. Contributions paid as a result of this sur-
charge shall not be credited to the employer's experience rating account. This surcharge
shall be effective during the next full calendar year after its imposition and during each full
calendar year thereafter until the employer has filed the required cash deposit or bond or
has shown timely filing of reports and payment of contributions for four consecutive calendar
quarters.
(k) (j) Any officer, major stockholder or other person who has charge of the affairs of
an employer, which is an employing unit described in section 501(c)(3) of the federal internal
revenue code of 1954 or which is any other corporate organization or association, or any
member or manager of a limited liability company, or any public official, who willfully fails
to pay the amount of contributions, payments in lieu of contributions or benefit cost pay-
ments required to be paid under the employment security law on the date on which such
amount becomes delinquent, shall be personally liable for the total amount of the contri-
butions, payments in lieu of contributions or benefit cost payments and any penalties and
interest due and unpaid by such employing unit. The secretary or the secretary's authorized
representative may assess such person for the total amount of contributions, payments in
lieu of contributions or benefit cost payments and any penalties, and interest computed as
due and owing. With respect to such persons and such amounts assessed, the secretary shall
have available all of the collection remedies authorized or provided by this section.
Sec. 6. K.S.A. 1997 Supp. 44-718 is hereby amended to read as follows: 44-718. (a) Waiver of rights void. No agreement by an individual to waive, release or commute such
individual's rights to benefits or any other rights under this act shall be valid. No agreement
by any individual in the employ of any person or concern to pay all or any portion of an
employer's contribution or payments in lieu of contributions required under this act from
such employer, shall be valid. No employer shall directly or indirectly make or require or
accept any deduction from remuneration to finance the employer's contributions required
from such employer, or require or accept any waiver of any right hereunder by any individual
in such employer's employ. Any employer or officer or agent of an employer who violates
any provision of this subsection shall, for each offense, be fined not less than $100 nor more
than $1,000 or be imprisoned for not more than six months, or both.
(b) Limitation of fees. No individual claiming benefits shall be charged fees of any kind
in any proceeding under this act by the secretary of human resources or representatives of
the secretary or by any court or any officer thereof. Any individual claiming benefits in any
proceeding before the secretary of human resources or a court may be represented by
counsel or other duly authorized agent, but no such counsel or agents shall either charge
or receive for such services more than an amount approved by the secretary of human
resources. Any person who violates any provision of this subsection shall, for each such
offense, be fined not less than $50 nor more than $500, or imprisoned for not more than
six months, or both.
(c) No assignment of benefits; exemptions. No assignment, pledge or encumbrance of
any right to benefits which are or may become due or payable under this act shall be valid;
and such rights to benefits shall be exempt from levy, except in accordance with section 6331 of the federal internal revenue code of 1986, and shall be exempt from, execution,
attachment, or any other remedy whatsoever provided for the collection of debt; and benefits
received by an individual, so long as they are not mingled with other funds of the recipient,
shall be exempt from any remedy whatsoever for the collection of all debts except debts
incurred for necessaries furnished to such individual or such individual's spouse or depend-
ents during the time when such individual was unemployed. No waiver of any exemption
provided for in this subsection shall be valid.
(d) Support exception. (1) An individual filing a new claim for unemployment compen-
sation shall, at the time of filing such claim, disclose whether or not the individual owes
support obligations as defined under paragraph (7). If any such individual discloses that such
individual owes support obligations, and is determined to be eligible for unemployment
compensation, the secretary shall notify the state or local support enforcement agency en-
forcing such obligation that the individual has been determined to be eligible for unem-
ployment compensation.
(2) The secretary shall deduct and withhold from any unemployment compensation
payable to an individual that owes support obligations as defined under paragraph (7):
(A) The amount specified by the individual to the secretary to be deducted and withheld
under this subsection, if neither (B) nor (C) is applicable; or
(B) the amount, if any, determined pursuant to an agreement submitted to the secretary
under section 454(20)(B)(i) of the social security act by the state or local support enforce-
ment agency, unless subparagraph (C) is applicable; or
(C) any amount otherwise required to be so deducted and withheld from such unem-
ployment compensation pursuant to legal process (as that term is defined in section 462(e) 459(i)(5) of the social security act) properly served upon the secretary.
(3) Any amount deducted and withheld under paragraph (2) shall be paid by the sec-
retary to the appropriate state or local support enforcement agency.
(4) Any amount deducted and withheld under paragraph (2) shall for all purposes be
treated as if it were paid to the individual as unemployment compensation and paid by such
individual to the state or local support enforcement agency in satisfaction of the individual's
support obligations.
(5) For purposes of paragraphs (1) through (4), ``unemployment compensation'' means
any compensation payable under the employment security law after application of the re-
coupment provisions of subsection (d) of K.S.A. 44-719 and amendments thereto, (including
amounts payable by the secretary pursuant to an agreement under any federal law providing
for compensation, assistance or allowances with respect to unemployment).
(6) This subsection applies only if appropriate arrangements have been made for im-
bursement by the state or local support enforcement agency for the administrative costs
incurred by the secretary under this section which are attributable to support obligations
being enforced by the state or local support enforcement agency.
(7) For the purposes of this subsection, ``support obligations'' means only those obli-
gations which are being enforced pursuant to a plan described in section 454 of the federal
social security act which has been approved by the secretary of health and human services
under part D of title IV of the federal social security act.
(8) For the purposes of this subsection, ``state or local support enforcement agency''
means any agency of this state or a political subdivision thereof operating pursuant to a plan
described in paragraph (7).
(e) (1) An individual filing a new claim for unemployment compensation shall, at the
time of filing such claim, be advised that:
(A) Unemployment compensation is subject to federal, state and local income tax;
(B) requirements exist pertaining to estimated tax payments;
(C) the individual may elect to have federal income tax deducted and withheld from
the individual's payment of unemployment compensation at the amount specified in the
federal internal revenue code; and
(D) the individual shall be permitted to change a previously elected withholding status.
(2) Amounts deducted and withheld from unemployment compensation shall remain in
the unemployment fund until transferred to the federal taxing authority as a payment of
income tax.
(3) The secretary shall follow all procedures specified by the United States department
of labor and the federal internal revenue service pertaining to the deducting and withholding
of income tax.
(4) Amounts shall be deducted and withheld under this section only after amounts are
deducted and withheld for any overpayments of unemployment compensation, child support
obligations, food stamp overissuances or any other amounts required to be deducted and
withheld under this act.
(f) (1) An individual filing a new claim for unemployment compensation at the time of
filing such claim, shall disclose whether or not such individual owes an uncollected over-
issuance (as defined in section 13(c)(1) of the Food Stamp Act of 1977) of food stamp
coupons. The secretary shall notify the state food stamp agency enforcing such obligation
of any individual who discloses that such individual owes an uncollected overissuance of
food stamps and who is determined to be eligible for unemployment compensation.
(2) The secretary shall deduct and withhold from any unemployment compensation
payable to an individual who owes an uncollected overissuance:
(A) The amount specified by the individual to the secretary to be deducted and withheld
under this clause;
(B) the amount (if any) determined pursuant to an agreement submitted to the state
food stamp agency under section 13(c)(3)(A) of the Food Stamp Act of 1977; or
(C) any amount otherwise required to be deducted and withheld from unemployment
compensation pursuant to section 13(c)(3)(B) of such act.
(3) Any amount deducted and withheld under this section shall be paid by the secretary
to the appropriate state food stamp agency.
(4) Any amount deducted and withheld under subsection (b) shall for all purposes be
treated as if it were paid to the individual as unemployment compensation and paid by such
individual to the state food stamp agency as repayment of the individual's uncollected
overissuance.
(5) For purposes of this section, the term ``unemployment compensation'' means any
compensation payable under this act including amounts payable by the secretary pursuant
to an agreement under any federal law providing for compensation, assistance, or allowances
with respect to unemployment.
(6) This section applies only if arrangements have been made for reimbursement by the
state food stamp agency for the administrative costs incurred by the secretary under this
section which are attributable to the repayment of uncollected overissuances to the state
food stamp agency.'';
And by renumbering the sections accordingly;
Also on page 2, in line 32, after the stricken material, by inserting ``44-716a and K.S.A.'';
also in line 32, after ``Supp.'', by inserting ``44-703,''; also in line 32, by striking ``is'' and
inserting ``, 44-712, 44-717 and 44-718 are'';
In the title, in line 11, after the stricken material, by inserting ``44-716a and K.S.A.''; also
in line 11, after ``Supp.'', by inserting ``44-703,''; after ``44-705'', by inserting ``, 44-712, 44-
717 and 44-718''; in line 12, by striking ``section'' and inserting ``sections''; and the bill be
passed as amended.
Committee on Education recommends HB 2837, as amended by House Committee,
be passed.
Committee on Elections and Local Governmant recommends HB 2683 be passed.
Committee on Energy and Natural Resources recommends HB 2868 be passed.
Also HB 2419, as amended by House Committee of the Whole, be amended on page 3,
after line 26, by inserting:
``New Sec. 6. (a) As used in this section, ``abandoned oil or gas well'' means an aban-
doned well, as defined by K.S.A. 1997 Supp. 55-191 and amendments thereto:
(1) The drilling of which was commenced before January 1, 1970; and
(2) which is located on land owned by the taxpayer claiming the tax credit allowed by
this section.
(b) For any taxable year commencing after December 31, 1997, and before January 1,
2001, a credit shall be allowed against the tax imposed by the Kansas income tax act on the
Kansas taxable income of a taxpayer for expenditures made for the purpose of plugging any
abandoned oil or gas well in accordance with rules and regulations of the state corporation
commission applicable thereto, in an amount equal to 50% of such expenditures made in
the taxable year.
(c) If the amount of the tax credit allowed by this section exceeds the taxpayer's income
tax liability for such taxable year, the amount thereof which exceeds such tax liability may
be carried over for deduction from the taxpayer's income tax liability in the next succeeding
taxable year or years until the total amount of the tax credit has been deducted from tax
liability.
(d) The total amount of credits allowed taxpayers pursuant to this section, including the
amount of credits carried over under subsection (c), shall not exceed $250,000 for any one
fiscal year.
(e) The secretary of revenue shall adopt such rules and regulations as necessary to carry
out the purposes of this section.'';
By renumbering sections 6 and 7 accordingly;
In the title, in line 15, after the semicolon, by inserting ``providing a credit from income
taxes for expenses incurred in plugging certain oil and gas wells;''; and the bill be passed as
amended.
Committee on Judiciary recommends SB 593 be amended on page 1, by striking all
in lines 42 and 43;
On page 2, by striking all in lines 1 through 15 and inserting the following new paragraph:
``(A) Required any new vehicle dealer to order or accept delivery of any new motor
vehicle, part or accessory of such part, equipment or any other commodity not required by
law, or not necessary for the repair or service, or both, of a new motor vehicle which was
not ordered by the new vehicle dealer;'';
Also on page 2, in line 16, by striking ``(C)'' and inserting ``(B)''; in line 18, after the
semicolon by inserting ``or''; in line 19, by striking ``(D)'' and inserting ``(C)''; in line 26, by
striking ``or''; by striking all in lines 27 through 31;
On page 4, by striking all in lines 24 through 43;
By striking all on page 5;
On page 6, by striking all in lines 1 through 33 and inserting the following new paragraphs:
``(1) Through the use of a written instrument or otherwise, unreasonably fail or refuse
to offer to its same line-make new vehicle dealers all models manufactured for that line-
make, or unreasonably require a dealer to: (A) Pay any extra fee;
(B) purchase unreasonable advertising displays or other materials; or
(C) remodel, renovate or recondition the dealer's existing facilities as a prerequisite to
receiving a model or series of vehicles. The provisions of this subsection shall not apply to
manufacturers of recreational vehicles;
(2) require a change in the capital structure of the new vehicle dealership, or the means
by or through which the dealer finances the operation of the dealership, if the dealership
at all times meets any reasonable capital standards determined by the manufacturer and in
accordance with uniformly applied criteria;
(3) discriminate unreasonably among competing dealers of the same line-make in the
sale of vehicles or availability of incentive programs or sales promotion plans or other similar
programs, unless justified by obsolescence;
(4) unless required by subpoena or as otherwise compelled by law: (A) Require a new
vehicle dealer to release, convey or otherwise provide customer information if to do so is
unlawful, or if the customer objects in writing to doing so, unless the information is necessary
for the first or second stage manufacturer of vehicles, factory branch or distributor to meet
its obligations to consumers or the new vehicle dealer, including vehicle recalls or other
requirements imposed by state or federal law; or
(B) release to any unaffiliated third party any customer information which has been
provided by the dealer to the manufacturer.'';
On page 7, by striking all in lines 10 through 43;
On page 8, by striking all in lines 1 through 3;
And by renumbering sections accordingly;
Also on page 8, by striking all in lines 5 through 43;
By striking all on page 9;
On page 10, by striking all in lines 1 through 35 and inserting the following new para-
graphs:
``(a) A vehicle dealer shall not transfer, assign or sell a franchise agreement or interest
in a dealership to another person unless the dealer first gives written notice to the first or
second stage manufacturer or distributor of the dealer's decision to make such transfer,
assignment or sale. The dealer shall provide the first or second stage manufacturer or dis-
tributor with any completed application forms and related information generally utilized by
the first or second stage manufacturer or distributor to conduct its review of prospective
new vehicle dealers, and a copy of all agreements regarding the proposed transfer, assign-
ment or sale.
(b) The first or second stage manufacturer or distributor shall send a letter by certified
mail to the dealer within 60 days of receipt of the information specified in subsection (a).
The letter shall indicate any disapproval of the transfer, assignment or sale and shall spe-
cifically set forth the reasons for the disapproval. If the first or second stage manufacturer
or distributor does not respond by letter within the 60-day period, its consent to the proposed
transfer, assignment or sale is deemed to have been granted. A first or second stage man-
ufacturer or distributor shall not arbitrarily or unreasonably withhold approval of the trans-
fer, assignment or sale of a franchise agreement or an interest in a dealership.
(c) Within 90 days after receipt of a notice of disapproval as provided in subsection (b),
the new vehicle dealer may file a complaint with the director with respect to the first or
second stage manufacturer or distributor's failure to approve the proposed transfer, assign-
ment or sale. When such a complaint has been filed, the director shall inform the first or
second stage manufacturer or distributor that a timely complaint has been filed and a hearing
is required in accordance with the provisions of K.S.A. 8-2411 and amendments thereto, to
determine whether good cause exists to disapprove the transfer, assignment or sale. A dis-
approval shall not be final until the director or the director's designee makes a final deter-
mination as to good cause.
(d) A first or second stage manufacturer or distributor shall not fail or refuse to approve
the transfer, assignment or sale of the business and assets of a new vehicle dealer, or refuse
to continue the franchise agreement with the prospective transferee after the holding of a
hearing on the complaint if the director or the director's designee determines that good
cause does not exist for the first or second stage manufacturer or distributor to fail or refuse
to approve such transfer, assignment or sale. The burden of proof shall be on the first or
second stage manufacturer or distributor to show that the disapproval of the transfer, as-
signment or sale was with good cause. Material factors to be considered may include, but
are not limited to: (1) Whether the basic financial and facility requirements of the franchise
agreement will be met by the proposed transfer, assignment or sale;
(2) whether the proposed purchaser, transferee or assignee is capable of operating,
managing and supervising such business; and
(3) the extent to which the refusal to approve will have a substantial and adverse effect
upon the dealer's investment or return on investment.
(e) The first or second stage manufacturer or distributor shall have a right of first refusal
to acquire the new vehicle dealer's assets or ownership in the event of a proposed change
of all or substantially all of the dealer's ownership, or the transfer of all or substantially all
of the new vehicle dealer's assets, if all of the following are met: (1) The first or second
stage manufacturer or distributor notifies the dealer in writing within the 60-day limit es-
tablished under subsection (b) of its intent to exercise its right of first refusal;
(2) the exercise of the right of first refusal will result in the dealer and dealer's owners
receiving consideration, terms and conditions that either are the same as or greater than
that which they have contracted to receive in connection with the proposed change of all
or substantially all of the dealer's ownership, or the transfer of all or substantially all of the
new vehicle dealer's assets;
(3) the proposed change of all or substantially all of the dealership's ownership or the
transfer of all or substantially all of the new vehicle dealer's assets does not involve the
transfer of assets or the transfer or issuance of stock by the dealer or one or more dealer
owners to a designated family member or members, including the spouse, child or grand-
child, spouse of a child or grandchild, brother, sister or parent of the dealer owner, or one
or more dealer owners, or to a qualified manager, or to a partnership or corporation con-
trolled by any such person; or to a trust arrangement established or to be established for
the purpose of allowing the new vehicle dealer to continue to qualify as such a dealer, so
long as the new vehicle dealer continues to qualify as such pursuant to the first or second
stage manufacturer or distributor's standards, or provides for the succession of the franchise
agreement to designated family members or qualified management in the event of the death
or incapacity of the dealer or its principal owner or owners; and
(4) except as otherwise provided in this subsection, the first or second stage manufac-
turer or distributor agrees to pay the reasonable expenses, including reasonable attorney
fees, which do not exceed the usual, customary and reasonable fees charged for similar work
done for other clients, incurred by the proposed owner or transferee prior to the first or
second stage manufacturer or distributor's exercise of its right of first refusal in negotiating
and implementing the contract for the proposed change of all or substantially all of the
dealer ownership, or the transfer of all or substantially all of the new vehicle dealer's assets.
No payment of expenses and attorney fees shall be required if the dealer has not submitted
or caused to be submitted an accounting of those expenses within 20 days of the dealer's
receipt of the first or second stage manufacturer or distributor's written request for such an
accounting. Such an expense accounting may be requested by a first or second stage man-
ufacturer or distributor before exercising its right of first refusal.
(f) A new vehicle dealer and its owners may appoint by trust, will or any other valid
written instrument a successor to the owner's interest in the franchise agreement upon the
owner's death or incapacity, subject to the following procedures: (1) Unless the first or
second stage manufacturer or distributor has good cause to refuse to approve the succession,
the successor may succeed to the ownership of the new vehicle dealer under the existing
franchise agreement if: (A) Within 90 days of the owner's death or incapacity, the successor
gives written notice of the successor's intent to succeed to ownership of the new vehicle
dealer and its franchise agreement; and
(B) the successor agrees to be bound by all the terms and conditions of the franchise
agreement with the prior new vehicle dealer.
(2) Upon request, the successor shall promptly provide the first or second stage man-
ufacturer or distributor evidence of the successorship appointment, as well as personal and
financial information reasonably necessary to determine whether the succession should be
approved by the first or second stage manufacturer or distributor.
(3) If a first or second stage manufacturer or distributor believes that good cause exists
to refuse to approve the intended succession under subsection (f)(1), then the first or second
stage manufacturer or distributor shall serve the new vehicle dealer and named successor
written notice of refusal to approve the intended succession within 60 days of its receipt of
the notice of the intended succession, or within 60 days of receiving the information re-
quested under paragraph (f)(2), whichever is later. The notice must contain specific grounds
for the refusal to approve the succession. In the event of such a refusal the new vehicle
dealer or successor may file a complaint as provided under subsection (c), and the matter
shall then proceed to hearing in the manner and on the same basis as the disapproval of a
transfer, assignment or sale.
(4) If notice of refusal to approve the intended succession is not served within 60 days
upon the intended successor, the successor may continue the franchise agreement and the
successor shall thereby be deemed approved by the first or second stage manufacturer or
distributor.'';
Also on page 10, in line 36, by striking ``(h)'' and inserting ``(g)''; in line 41, by striking
``of the new vehicle dealer''; in line 43, by striking ``of the new ve-'';
On page 11, in line 1, by striking all before the period; in line 2, by striking all after ``4.'';
by striking all in lines 3 through 7; in line 8, by striking all before ``Any''; in line 12, by
striking ``contain provisions which''; in line 22, by striking ``8-2413 and''; also in line 22, after
``8-2410'' by striking ``and''; in line 23, by striking ``8-2431'';
On page 1, in the title, in line 10, by striking ``liability for dam-''; in line 11, by striking
``ages;''; also in line 11, by striking ``8-2413 and''; in line 12, by striking ``; also repealing'';
in line 13, by striking ``K.S.A. 1997 Supp. 8-2431''; and the bill be passed as amended.
Also SB 667 be amended on page 4, in line 24, by striking ``or''; in line 27, by striking
the period and inserting ``; or
(g) the sale, transfer, furnishing, distribution, manufacture, administering, dispensing or
possession of less than 24 grams of any drug product containing a regulated chemical if the
drug product is lawfully sold, marketed, transferred or furnished over the counter without
prescription pursuant to the federal food, drug and cosmetic act and regulations adopted
thereunder.``; and the bill be passed as amended.
Committee on Utilities recommends HB 2743, as amended by House Committee,
be amended on page 2, in lines 42 and 43, by striking ``the integrity of ''; and the bill be
passed as amended.
REPORT ON ENROLLED BILLS
SR 1825, 1826, 1827, 1828 reported correctly enrolled, properly signed and presented
to the Secretary of the Senate on March 10, 1998.
On motion of Senator Emert the Senate adjourned until 2:30 p.m., Thursday, March 12,
1998.